At one minute past midnight tonight, barring
any last-minute capitulations, the Ontario government will launch
a trade war against Quebec construction companies doing business
in Ontario. The retaliatory measures, intended to "mirror"
the treatment of Ontario construction workers by Quebec, will
include locking Quebec companies out of Ontario government construction
contracts, and stepped-up enforcement of existing regulations
that will make business difficult for Quebec companies in Ontario.
"There will be limits on government
contracts available to Quebec companies, increased enforcement
of health, safety, and worker's compensation regulations, and
of retail sales tax laws," said an Ontario government source
yesterday. Mike Harris, the Ontario premier, will announce
at a news conference the details of the retaliation intended to
"level the playing field for Ontario construction workers".

Despite an emerging consensus that barriers
to labour mobility between provinces hurt economic growth, and
a growing list of interprovincial agreements aimed at liberalizing
the movement of workers across Canada, the Ontario construction
sector has continued to protest that it is easier for them to
do business in New York state than in Quebec.

The Ontario government said yesterday that
it has had enough negotiating. "The deadline is firm," said Jim
Flaherty, the Ontario Labour Minister. "We are not optimistic.
We have been waiting since December for the government of Quebec
to move on the issue of open access to workers, but they have
not budged." If the first set of measures do not persuade
Quebec to change its ways, Ontario may create new laws to penalize
Quebec companies, a government source said yesterday. Though the
legislation would not single out Quebec companies for retaliation,
it would be applied to any province which "does not treat
Ontario workers fairly."

But while Ontario officials talked tough
yesterday, Lucien Bouchard, the premier of Quebec, took a more
optimistic tone, and signalled a willingness to reach a last-minute
deal. He said he would call Mr. Harris himself to avert a crisis.
"I have a couple of ideas we could explore
to make sure that there wouldn't be any impasse between Ontario
and Quebec,"" Mr. Bouchard said. As of yesterday afternoon,
however, the two premiers had not talked.

The Quebec premier called Ontario "a
friend of Quebec and an important economic partner," and
said he was not surprised by the Ontario government's position.
"It's a vigorous negotiation. They are defending their interests
and we are defending ours."

Mr. Bouchard said he wanted to defend a 1996
agreement the two provinces reached on labour mobility in the
construction sector. "It's important for us to find a way
to maintain this agreement and find ways to make sure it remains
operational," he said.

However, Mr. Flaherty accused Quebec of not
abiding by the spirit of the agreement. "In terms of application, the Quebec
government consistently tries to narrow the scope of the agreement,"
he said. On Monday, Mr. Flaherty rejected a call by Diane Lemieux,
Quebec's Labour Minister, to extend the deadline until April 30.
"I am disappointed that Quebec still
refuses to guarantee full and open access, despite three months
of discussion," Mr. Flaherty wrote. He said Quebec "has
failed to resolve a number of key issues."

According to Ontario labour ministry, there
are about seven times more Quebeckers working in Ontario than
Ontarians working in Quebec construction. John DeVries, president of the Ottawa Construction
Association, supported Ontario's tough stance. About a quarter
of the workers in the Ottawa area come from Quebec, he said. But
in Quebec, Ontario workers face a "culture clash," with
Quebec's highly unionized and regulated system, he said. "In Ontario, someone who rips forms
off a concrete pillar is a labourer. We give him a hammer and
say, 'go to it', " Mr. DeVries said. "In Quebec, anyone
who holds a hammer is a carpenter and has to be licensed."